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  • No matter where you look, the Euro is under a great deal of technical pressure: versus the commodity currencies (EUR/AUD, EUR/CAD, EUR/NZD) or even against the Nordic currencies (EUR/NOK, EUR/SEK). Get your market update from @CVecchioFX here: https://t.co/UJvFdVbrk6 https://t.co/lJGEuR5TIE
  • RT @FxWestwater: $AUDUSD Aims to Retake Key Level as Markets Digest US Covid Stimulus News Link: https://www.dailyfx.com/forex/fundamental/daily_briefing/daily_pieces/asia_am_briefing/2021/03/08/AUDUSD-Aims-to-Retake-Key-Level-as-Markets-Digest-US-Covid-Stimulus-News.html?CHID=9&QPID=917708&utm_source=Twitter&utm_medium=Westwater&utm_campaign=twr https://t.co/eYwb…
  • This seems likely to reflect the near-certain passing of the US$1.9 trillion stimulus top-up in the US https://t.co/lmIuNpLmV6
  • Risk-on tone seemingly prevailing in early Asia-Pacific trade. US stock index futures up with commodity currencies (AUD, CAD, NZD, NOK), crude oil, gold. Anti-risk USD, JPY and CHF down. https://t.co/nJgxWHCGCa
  • Did you know a Doji candlestick signals market indecision and the potential for a change in direction. What are the top five types of Doji candlesticks? Find out https://t.co/c51s3IBcEu https://t.co/brgbPlNTIl
  • WTI crude oil prices surpassed the 200% Fibonacci extension level of US$ 66.65 after Saudi Arabia said a storage tank in the Ras Tanura export terminal was attached by a drone on Sunday. Brent price breached US$ 70 mark for the first time since January 2020. https://t.co/hB39eHZLVw
  • Crude oil will likely extend its bull run after one of the most protected oil facilities in the world came under attack on Sunday - BBG
  • *Reminder: Weekly Strategy Webinar tomorrow morning at 8:30am EST on DailyFX - https://t.co/lxd5fZnn4H Mid-Week Market Check Up with IG on Wednesday at 9:30am EST - https://t.co/8SFBJxNZrA
  • Entry orders are a valuable tool in forex trading. Traders can strategize to come up with a great trading plan, but if they can’t execute that plan effectively, all their hard work might as well be thrown out. Learn how to place entry orders here: https://t.co/1mnOXUuBpt https://t.co/6BhlgjWVYw
  • We are going to start the new trading week with a few critical technical breaks like the $QQQ's (NDX) H&S neckline break on volume and EURUSD's clearance below 1.1950. Are these the makings of trends? My take: https://www.dailyfx.com/forex/video/daily_news_report/2021/03/06/EURUSD-and-Nasdaq-100-to-Start-Week-with-Multi-Month-Breakdown.html https://t.co/iR5w7iDkDU
GBP Fundamental Forecast: And The Brexit Band Played On

GBP Fundamental Forecast: And The Brexit Band Played On

Nick Cawley, Strategist
GBP

Sterling (GBP) Talking Points: Brexit

  • Brexit delayed until April 12 at least, but will anything change?
  • Sterling continues to absorb the blows, but for how long?
  • UK data this week has been positive.

The DailyFX Q1 GBP Forecasts are available to download including our short- and medium-term look at Sterling.

Fundamental Forecast for GBP: Neutral

This week the EU gave the UK further time to pass the Withdrawal Agreement – although they refused to make any concessions whatsoever to the bill – shifting the end date to May 22 if PM May gets the necessary votes in Parliament next week to pass her proposal. This remains unlikely at the current juncture and if PM May loses again, the UK would only have until April 12 to either suggest a new course of action, agree to a long extension or leave the EU. According to European Council President Donald Tusk ‘all options will remain open’ to the UK until April 12.

It is likely that over the next few days a variety of opinions and options will be aired but unless any of these options finds a consensus in the House of Commons, then a Hard Brexit option remains. While neither side wants this scenario, the odds on it happening will narrow if PM May fails in the House for a third time.

UK data prints have met or beaten expectations this week, with record high employment figures, solid wage growth, core inflation nudging 0.1% lower to 1.8% y/y, while UK retail sales surprised to the upside on Thursday. The UK economy remains stuck between record low unemployment, positive real wage growth and weak growth, a headache down the line for the Bank of England. Next week the only domestic data of note is the final look at UK Q4 GDP on Friday with a quarterly figure of 0.2% and an annual figure of 1.3% expected to be confirmed.

DailyFX Economic Calendar

Against this backdrop, GBPUSD is ending the week around 1.3190, just over one cent off its high print on Tuesday and around two cents higher than its low print on Thursday. Sterling volatility remains high and is expected to stay at these levels over the next few weeks.

Looking for a technical perspective on the GBP? Check out the Weekly GBP Technical Forecast.

GBPUSD Daily Price Chart (July 2018 – March 22, 2019)

GBPUSD

IG Client Sentiment data show 56.4% of traders are net-long GBPUSD. We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests that GBPUSD prices may fall. However, if we factor in recent daily and weekly positional changes, we get a stronger GBPUSD bearish trading bias.

Traders may be interested in two of our trading guides, especially in times of volatilityTraits of Successful Traders and Top Trading Lessons – while technical analysts are likely to be interested in our latest Elliott Wave Guide.

--- Written by Nick Cawley, Analyst

To contact Nick, email him at nicholas.cawley@ig.com

Follow Nick on Twitter @nickcawley1

Other Weekly Fundamental Forecast:

Australian Dollar Forecast – Australian Dollar Likely Loser In Ugly Contest With US Cousin

https://www.dailyfx.com/forex/fundamental/forecast/weekly/AUD/2019/03/22/Australian-Dollar-Likely-Loser-In-Ugly-Contest-With-US-Cousin.html

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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